AGT privatization gets shareholders’ approval

Going-private deal's next stop is Ontario Superior Court

The privatization of Canadian pulse processor AGT Food and Ingredients is set to move another step forward as company officials take their plan to Ontario’s Superior Court on Monday.

The Feb. 11 court date in Toronto comes after AGT shareholders voted Tuesday at a special shareholders’ meeting in favour of privatization, according to a company news release.

Shareholders, representing a total of 74.8 per cent of AGT’s outstanding shares, voted 72.5 per cent in favour of the privatization with 27.5 per cent against, AGT said.

Following the court ruling, the company expects to be delisted from the TSX sometime during the first quarter or early in the second quarter. A company official declined to comment publicly on the privatization when contacted.

ADVERTISEMENT

The buyer group has been led by AGT CEO Murad Al-Katib and includes other top AGT executives, plus Fairfax Financial Holdings and Point North Capital. As part of the group’s privatization plan, they will acquire all outstanding shares for $18 per share.

The group announced its intentions to take AGT private last July. Company shares that day leapt from $13.17 per share to $17.76, but by early December the price slipped to $15.84. The price fluctuated over the next couple of months and gained $1.56 this week alone, closing Friday at $17.86.

However, that price is a far cry from the $42.05 at which AGT traded in May 2016. AGT’s share values were hurt by India increasing its import duties on pulses. India had been Canada’s largest pulse customer.

Shareholders opposed to AGT’s privatization, led by the investment management firm Letko, Brosseau and Associates, have argued the company has been undervalued.

Letko Brosseau, which manages an 18.6 per cent stake in AGT, reiterated in a Jan. 29 statement that it would vote against the going-private deal.

ADVERTISEMENT

AGT’s financial performance, Letko Brosseau said, has been “negatively impacted by industry factors and the proposed transaction comes during this time of weak performance and low share price.”

The investment firm said it “believe(s) these industry pressures will ease and expect(s) that the company’s financial performance should strengthen as industry conditions improve.”

Al-Katib started AGT under the SaskCan Pulse Trading banner in 2003. By 2009, it had evolved into Alliance Grain Traders, when the Alliance Grain Traders Income Fund became a publicly-traded corporation. Alliance then morphed into AGT Food and Ingredients in 2014.

— Glen Hallickwrites for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting. Includes files from Ashley Robinson of MarketsFarm and Glacier FarmMedia Network staff.